IBM's revenue deflated in 2013's first quarter

The company said it wasn't able to close several crucial deals by the end of the quarter

Unable to close a number of large mainframe and software deals by the end of the quarter, IBM has reported a 5 percent decline in revenue to US$23.4 billion for the first quarter of 2013.

Net income for the quarter ending March 31 also shrank for IBM, by 1 percent, compared with the same quarter a year earlier. First-quarter net income was US$3 billion.

"Despite a solid start and good client demand we did not close a number of software and mainframe transactions that have moved into the second quarter," said Ginni Rometty, IBM chairman, president and chief executive officer, in a statement. 

Despite sluggish revenue across all of IBM's sectors, company executives pointed to its failure to close a number of multimillion-dollar deals as the reason for the company's lackluster financial performance.

"We thought we had those deals [closed] right up to the end," said Mark Loughridge, IBM chief financial officer and senior vice president, in an investor webcast. He estimated that IBM had about $400 million in deals it was unable to book by March 31. He remained confident that these deals will be signed, however. "The rollover of these deals positions us for a strong start in our next quarter," he said.

Despite the slump in revenue, the company was able to increase earnings per share to $2.70 this quarter, up 3 percent from a year earlier. And Loughridge reiterated that IBM remains on course to fulfill its promise to earn at least $16.70 per share for the full year. 

IBM hardware was hit particularly hard this quarter. Revenue from the company's systems and technology group declined by 17 percent, to $3.1 billion. "This was not the quarter we were expecting from systems and technology," Loughridge said.

By sector, the software unit fared the best, despite its failure to close a number of critical deals. It reported flat revenue of $5.6 billion. Services saw some decline in revenue. The global technology services segment's revenue fell 4 percent to $9.6 billion, and the global business services segment revenue was down 3 percent to $4.5 billion. 

Geographically speaking, first-quarter revenue was down 4 percent, to $10 billion, in the Americas. Revenue from Europe, Middle East and Africa totaled $7.3 billion, down 4 percent. Revenue from the Asia-Pacific region decreased by 7 percent to $5.7 billion, though it fell only 1 percent after adjustments for currency fluctuations. 

Various IBM initiatives have helped the company. Business analytics revenue went up by 7 percent. Revenue from the company's Smarter Planet initiatives went up by more than 25 percent, and revenue from cloud services surged by more than 70 percent. However, IBM did not break out specific revenue figures for any of these areas.

Joab Jackson covers enterprise software and general technology breaking news for The IDG News Service. Follow Joab on Twitter at @Joab_Jackson. Joab's e-mail address is Joab_Jackson@idg.com

Join the PC World newsletter!

Error: Please check your email address.

Tags business issuesIBMfinancial results

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Joab Jackson

IDG News Service
Show Comments

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?